Thursday, January 13, 2011

The Water Rate Increase Protest Is Not Over

Elaine Aguilar
City Manager
City of Sierra Madre
City Hall
232 W. Sierra Madre Blvd.
Sierra Madre, CA 91024

Re: Sierra Madre Water Rate Increase

Dear Ms. Aguilar:

As you know, at its meeting on July 27, 2010, the Sierra Madre City Council ("Council") determined that there was an insufficient number of valid protests to defeat the Council's proposed water rate increase ("Proposed Rate Increase"). Therefore, the Council conducted several additional hearings on the Proposed Rate Increase. At its meeting on November 9, 2010, however, the Council directed City Staff to return to the Council with a different, proposed water rate increase ("Revised Rate Increase").

At its meeting on November 23, 2010, the Council passed a motion by a vote of 4 to 1 approving ordinance 1312 ("Ordinance"), which would implement the Revised Rate Increase at its first reading. The hearing on the second reading of the Ordinance was scheduled for the Council's meeting on December 14, 2010. The Mayor, however, unilaterally postponed that hearing until January 11, 2011, after learning that Council Member Walsh, who previously voted to approve the Ordinance, could not attend the Council's meeting scheduled for December 14, 2010. On January 11, 2011, the Council passed a motion by a vote of 4 to 1 adopting the ordinance at its second reading.

For the reasons set forth below, the undersigned demand that the Council rescind the Ordinance at its next regularly scheduled Council meeting. Thereafter, should the Council determine to re-adopt the Ordinance, the undersigned demand that the Council conduct a public hearing on the Ordinance, not less than 45 days after a mailing of a legally adequate, written notice of the Revised Rate Increase to the record owner ("Owner") of each identified parcel.

I. The Notice That Was Sent To Owners Did Not Satisfy Proposition 218's Constitutionally Mandated Notice Requirements

California's Proposition 218, which amended the California Constitution, requires, among other things, that 45 days before the hearing on any proposed rate increase that the City provide written notice to the Owner of:

(1) The amount of the fee or charge proposed; and

(2) The reason for the proposed fee or charge.

Proposition 218 further provides that "[n]o fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question."

The provisions of Proposition 218 including the above requirements "shall be liberally construed to effectuate its purpose of limiting local government revenue enhancing taxpayer consent."

As discussed below, the City of Sierra Madre has failed to satisfy these constitutionally mandated requirements and effectuate Proposition 218's purposes of limiting local government revenue enhancing taxpayer consent.

A. The Notice Did Not Contain the Amount of the Proposed Rate Increase as Required by Proposition 218

First, the notice ("Notice"), which was sent to Owners on or about May 17, 2010, did not provide each Owner with the amount of the Proposed Rate Increase as required by Proposition 218. Instead, the Notice required each Owner to estimate his or her increase based on such factors as the meter size and the possible applicability of a discount for "low income." Because the Notice lacked definitions or explanations for such factors, however, it was impossible for each Owner to make any estimation of meter size or determine whether he or she qualified as "low income."

Realizing that the written notice failed to adequately inform each Owner about the Proposed Rate Increase, the City belatedly sent each Owner a flyer ("Flyer") entitled "Water Rate Increase Fact Sheet FAQ" on or about June 23, 2010. For the first time, the Flyer explained to Owners how they could determine the meter size diameter by finding the meter box and then looking for a stamp on the meter. If that failed, the Flyer provided the names and numbers of City employees who could "look up" the size of each Owner's meter. Also, for the first time, the Flyer explained that the term "low income" refers to both "low income" and "extremely low income" as those terms are defined by the United States Department of Housing and Urban Development rather than definitions of low income provided by different government agencies.

The explanations and definitions in the Flyer provided information that some Owners could use to estimate the amount they would be charged under the Proposed Rate Increase. This critical information was not provided to the Owners, however, until on or about June 23, 2010, which was less than the 45 days before the hearing required by Proposition 218 that was held on July 13, 2010.

B. The Notice Did Not Contain The Reason For the Proposed Rate Increase as Required By Proposition 218

Second, the Notice did not provide the reasons for the Proposed Rate Increase as required by Proposition 218. Instead, in circular fashion, the Notice provided that "the City imposes its water rates in order to fund the City's costs of operating and maintaining the water system, as well as to pay off costs of improvements to that system." Absent in the Notice, however, is the actual "reason" or "reasons" that the current level of funding is insufficient to accomplish these purposes and now must be increased.

Realizing that the Notice failed to adequately inform each Owner about the reasons for the Proposed rate Increase, the Flyer disclosed the City's purported "reasons" for increasing the water rates in Sierra Madre. These reasons included, but were not limited to:

1. Replacing aging water infrastructure; and

2. Maintaining the City's bond rating

Many Owners no doubt appreciated the City's belated dissemination of these purported "reasons" for the Proposed Water Rate Increase. This critical information was not provided to the Owners, however, until on or about June 23, 2010, which was less than 45 days before the hearing required by Proposition 218 that was held on July 13, 2010.

Many Owners after reading the Flyer were also (no doubt) convinced that the increased revenue from the Proposed Rate Increase would be used to replace the aging infrastructure. In a letter addressed to a resident and dated August 26, 2010, the City Staff, conceded that the money generated from the Proposed Rate Increase, if approved, would be insufficient to effect capital improvements.

Further, the minutes of several City Council meetings underscore the importance that City Council Members and the Assistant City Attorney attached to maintaining the City's bond rating.

At the City Council meeting on July 13, 2010, Council Member Nancy Walsh stated that "[t]he bond rating is important. [We] don't want downgrading."

At the same City Council meeting, the Assistant City Attorney Scott Porter stated that, "we need to be aware of the Bond issue."

At an earlier City Council meeting on June 22, 2010, Council Member Moran stated that, "we need to retain [the] bond rating."

In addition to maintaining the City's Bond Rating, it appears that there was another reason for the Proposed Rate increase, which the City neglected to mention in the Notice. The City made a PowerPoint presentation to interested residents on October 2010 entitled "The 411 on H2O." PowerPoint slides in that presentation reveal the the City will be making its first loan payment of $145,687.50 on a $1,545,000 "water loan" from the San Gabriel Valley Municipal Water District on July 21, 2011 (i.e., the effective date of the Revised Water increase). Accordingly, it appears that in addition to maintaining the City's bond rating, the City's reason for proposing the Proposed Rate increase and eventually implementing the revised rate Increase was to generate revenue to pay down this loan.

It is worth considering just how many Owners would have filed written protests had the City notified them that the revenue from the Proposed Rate Increase and later the Revised Rate Increase was intended primarily to maintain the City's bond rating and to service debt instead of effecting repairs on the aging water infrastructure.

C. The City Failed to Send Notices For Every Hearing on the Proposed Rate Increase and Revised Rate Increase as Required By Proposition 218

Fourth, the City failed to comply with the notice requirements of Proposition 218 because it failed to provide the Owners with separate Proposition 218 notices for the multiple City Council meetings after July 23, 2010, in which the Proposed Rate Increase and later the revised Rate Increase were considered. Indeed, the City Council has never sent the Owners any notice, pursuant to Proposition 218, setting forth the "tiers" of fees under the Revised Rate Increase or he reason for the revised Rate Increase.

II. The City's Failures To Notify The Non-English Speaking Residents Of Sierra Madre Of The Proposed Rate Increase And The Revised Rate Increase Constitutes Violations Of The Due Process Clauses Of The Federal and California Constitutions

The Notice was only printed in English. By refusing to print the Notice (and subsequent notices) in Spanish and other languages spoken in Sierra Madre as well, the City ensured that non-English speaking Owners would be unaware of the Proposed Rate Increase and the Revised Rate Increase. The City's conduct in that regard constitutes a violation of those non-English speaking Owners' due process rights under the Federal and California Constitutions.

III. The City Intends to Use Revenue From The Revised Fee Increase for Non-Water Service Related Purposes

As discussed above, it appears that the City proposes to pay down the San Gabriel Valley Municipal Water District loan with revenue generated from the Revised Rate Increase. As cited above, proposition 218, provides that "[n]o fee of charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question. Servicing a municipal debt is hardly "a service (e.g., provision of water to Owners) actually used by or immediately available to the Owners; accordingly, the City's proposal violates Proposition 218.

IV. Conclusion

For the reasons set forth above, the undersigned demand that the Council rescind the Ordinance at its next regularly scheduled Counsel meeting. Thereafter, should the Council determine to re-adopt the Ordinance, the undersigned demand that the Council conduct a public hearing on the Ordinance, not less than 45 days after mailing a legally adequate, written notice of the Revised Rate Increase to the record owner ("Owner") of each identified parcel.


Anita Delmer
John Herrmann
Kurt Zimmerman
John Crawford


  1. Thank you, Anita Delmer, John Herrmann, John Crawford and former Mayor Kurt Zimmerman.

  2. Uh oh! Residents standing up for their Constitutionally gauranteed freedoms. They won't like that down at City Hall.

  3. Good Luck to all who DareJanuary 13, 2011 at 6:35 AM

    Thanks, Anita, John, Kurt and Sir Eric/Mod/John Crawford!

    Let's go for it, Sierra Madre! Stand by these patriots. They are FIGHTING for US, not special interests!

  4. Q) What do the water rate hike and Joe Mosca have in common?

    A) The story is different every time you see them.

  5. blank blank blank blank p***** offJanuary 13, 2011 at 7:38 AM

    Those of you who work late and who arrive home hoping to view Tuesday's vitally important City Council Meeting on Channel 3 were met with the usual superb broadcasting of the picture only. Yes. Once again at a critical juncture in SM politics Channel 3 comes through with a video but fails to let us know what the hell was said. I personally am going to complain to the city this morning and suggest we find a new vendor for our Channel 3 public broadcasting.

  6. Thanks for doing this, Kurt, Crawford, John and Anita.

  7. Now what is the next step available to us to reverse this city hell bent on breaking the law?

  8. Enough already...their stunning and deplorable betrayal of the citizens demand consequences.It is not an question of negotiation;these people are obviously following another agenda.They need to go!!!NOW

  9. I always love it when the other sites attempt to justify the rate hike by saying that the "City Attorney has assured the City Council that all the proper steps were taken" or some such crap. Why wouldn't she say that? She was the one responsible for making sure they were. What else is she going to say?

    I wonder how much we paid for her carelessness?

  10. Finally!!!!!!

  11. We're cooking up some nice fresh crow.

    Bon appetit Gang of 4!

  12. Thank you to the Tattler leaders. We think the phrase is "The cost of liberty is eternal vigilance." We are also putting aside a few "Benjamins" for you.

  13. The press release version of this in the Star-News sure puts out a different story, and its the one most folks pay attention to.

  14. 8:32 - fortunately Courts of Law are not popularity contests.

  15. But won't that mailing cost $9,000 including the bloated staff time? We must save our money for consultants for the housing RFP.

    Wonderful news John,, Kurt, Anita, and John. I am with you 200%.

  16. We need the money to pay for fixing our old rusty pipes. Oh wait, we need the money to pay for $19 million in bond debt. Oh wait, we need the money to get our Dunn and Bradstreet rating back up so we can sell some bonds. Oh wait, we need the money to pay of that $1.5 million San Gabriel Water District loan back. Oh wait ...

  17. Sorry, "Oh Wait." We've seen enough.

  18. I'm so torn!!!!!! Whom do I believe? Our former Mayor Kurt Zimmerman, who has a reputation for honesty, or Joe Mosca, who lied to us when he said he would support the residents rights to vote on Measure V?

  19. oh wait, we need a new 7 million dollar library and oh wait, we need a new 50K counter at city hall

    the whole scenerio reeks of ethical corruption and political favors

    it's obvious that Buchanan, the savior of the library which obviously never existed before he and Rob Stockly moved to town, the Friends of the Library were bought into silence with the tax hike lies sold by Mosca, Buchanan and Moran because the payoff was a new library, something the city desperately needs...yeah sure John B

    the entire tax hike was a lie and it continues to be a lie

    when I see John Buchanan, I see a liar

  20. It's becoming clear that the CC-1 couldn't accept MaryAnne's solution because they still haven't entirely disclosed their water increase scheme. Believe you me, there's more to come.

  21. John, are you going to sue the City to enforce our Prop 218 rights?

    If so, can I send you a contribution to help defray your legal costs?

  22. 7:38,

    Complain to City Hall? They just renewed the contract for 3 more years.

    City Hall controls the Mt.Views News, the cable channel 3, and the new radio station. No wonder they are so ticked that they can't control the Tattler!

  23. Did Mosca get his law degree online from the University of Wikipedia?

    That's most certainly where he and Buchanan must do their legal research.

    Both are corporate drones given unlimited time off work to push the development agendas of their respective employers.

  24. sure Joe, we are going to give the city millions of dollars in a bogus tax hike and no oversight on how it's going to be spent...sure Joe and John B, you've both been so ethical and honest with us...sure we'll trust you now....we'll just forget that you two and Josh Moran just bold faced lied to us...sure it's okay...take our money....ignore the law....sure we trust you.....

    you've all earned our trust

    what you earned is to never be trusted again

  25. The rate hike is to repair the aging water infrastructure. No wait, it's to maintain our bond rating. No wait, it's to service our debt obligation. No wait,....

  26. The problem with the City's proffered citizen's oversight committee to oversee the water department expenditures is that by the time the committee meets the expenditures have been committed, the warrants signed, and there is no opportunity for oversight.

    Same with the warrants the City so proudly lists in the City Council Agenda twice a month. No opportunity to challenge the expenditure - it's already a done deal.

    Complaining about SMTV3? It's a prime example of citizen involvement. The City appointed a committee and it meets monthly. Non-existent oversight. A waste of time.

    The City hires staff to babysit the residents by forming committees, placates them by publishing their names on agendas, then does whatever it had in mind in the beginning.

    Look at the rosters of the committees. Same folks who belong to the Friends of the Library, the Civic Club, the Arts Council, the Tree Commission - sycophants who sit around congratulating themselves on what good work they do for the City.

    But make no mistake, the Council and the City Manager run the town.

  27. Looks like Zimmerman's SMRRD have been reborn, you remember them, the group that fought out of town BIA and CAR's $70,000 + to defeat their Measure V? They took back Sierra Madre from the developers, realtors and their greedy investors.
    They wanted to build 4 story buildings in downtown Sierra Madre, along with other atrocities.
    SMRRD had under $30,000 in small donations from the public.
    SMRRD and the voters WON.

    I challenge all you good people to get ready to donate again, anything you can afford. I know times are tough, but they will get even worse if these criminals are allowed to pull off this "granddaddy" of all shenanigans, the water rate/pay off the bond debt scam on us.
    They lied. They are in the wrong, and just like Measure V, we can stop them.
    We don't have to get petition signatures, or send out mailers, it will be realively easy to raise whatever these good folks need to fight.
    I know we have top attorneys. We did during Measure V, and they are still around.
    Let us know, John Crawford, when you all will need some additional funds.

  28. We still have MaryAnn MacGillivray and Nancy Shollenberger and the good people who just sent that letter to Elaine, 9:56.
    Thank God for John Crawford, he is our hero.
    Without John, we would know nothing.

  29. Anyone wishing to donate for legal costs in this effort, please stand by. We will have an announcement about this within the next couple of days.

    Thank you!

  30. It won't matter that the CC-1 are working behind the scenes to influence the long since undergrounded DIRTS. The court follows the law, not the rumor mill.

    Good work! They may have their Council of Four but we have the Tattlers led by Zimmerman, Crawford, Delmer and Herrmann.

  31. This whole scenario is absolutely Creepy...How can anyone convince themselves to support and vote for such an outrageous ,obscene and hurtful fraud upon the citizens they are suppose to represent.My question to these brigands is,Who Do You Represent???

  32. The Gang of Four and their atty that we pay for never for a second thought that the people of this town would rise up the way they did to protest this rate hike. They just threw together a happy lie and figured nobody would say peep. I believe they thought that there was some some of euphoria in town over Mosca becoming Mayor, and nothing would happen. They made a mistake. And they were caught in a big fat lie.

  33. Actually the SMCh3 viewing, absent audio, was refreshing. Council Members Moran & Walsh were consistent in that they had nothing to say and proved it.

    Developers Real Estate Agents, Brokers, City Attorneys, and City Managers are subject to the glare of the internet and the light it casts on activities. Gone are the days of obfuscation. You need to tell the truth and say what you mean and mean what you say. When Sandi Levin advised, Its really a matter of "Policy" not a "leagal requirement", so go ahead and do it. Attorney Levin speaks balderdash, "bluffing and trivia" by defination. So there we have it. A City Council speaking "balderdash" How nice!

  34. 9:56 great post, but one minor correction. The opponents of Measure V actually spent over $170,000 to defeat it. Thankfully, they failed.

  35. Sierra Madreans Against Repressive TaxationJanuary 13, 2011 at 10:51 AM


  36. I like it! It's official - we got our acronym!

  37. I would change the word to R to stand for Repulsive

  38. With it and for it!January 13, 2011 at 11:25 AM

    Hot Dam, let the bake sales begin!

  39. I just ran into Josh. He says he's going to boycott all the businesses that advertise on The Tattler.

  40. SMART! Let's roll!

  41. Oh, and the cc-1 worked so hard to keep the rate raise under the "cap" so they wouldn't have to send out another 218 letter, as Sandy reminded them over and over again. Why are they so afraid of the Sierra Madre citizens? We will do what we have to do for our City if given adequate and logical reasons.

  42. We will force them to work for us.

  43. Of course we will, 12:07, MacGillivray said that the people always come through if it's legitimate and fair.
    Problem is, they have not come up with logical reasons, as of now, just a lot of spin.

    SMART.....let's put integrity back in city hall.

  44. Off Topic,

    Just drove by the EVG station. The door is open and there was an older man inside. New operator, owner, FBI ????

  45. Who came up with the acronym? It's great!!!!!!

  46. We hired a consultant for around $25,000. If we can get another $15K we'll get a logo as well.

  47. 2:54. I here it was Zimbo. He always comes through.

  48. 10:19 Point of clarification, they were caught in a series of big fat lies.

  49. I rememebr talking to bruce and Elaine on the 5th of July. That was when the 4th of july parade was. They told me that the reason for the water rate hike was all about bad pipes. Bruce even had a piece of one on the table in front of him. They didn't say anything at all about bonds.

  50. is the city still trying to sell the bad pipes story?

    that was part of the original spin when in fact the council was pushing for a new 7 million dollar library and a $ 50,000 counter for city hall

    bottom line, Buchanan and Mosca and Moran lied and lied and lied to us and then they attempted to circumvent Prop 218

    didn't they tell us that our water pipes were fixing to burst all over the city and I haven't heard about a pipe exploding since the first mishap and the bonzai push for a immediate tax hike

    sorry Bruce, the water tax hike was never about pipes, it was about special pork projects for Moscan and Buchanan and building a infrastructure that would sustain large development and appease Mosca and Buchanan's giddy fascination with SCAG and it's desire to have Sierra Madre able to reach a target population of 19,000

    Meanwhile, Buchanan and Mosca's employers will benefit from the web of deceit spun by the two Councilmen

    and Josh Moran has the inside track to sell his home mortgages

  51. both Buchanan and Mosca seem to forget that they actually live here and that an overwhelming majority of their neighbors now perceive them both as being liars and complety unethical

    and it doesn't bother them one bit

  52. It's not lying, it's leadership!

  53. Can't even get 'em to a City Council meetingJanuary 13, 2011 at 4:40 PM

    4:12 and 4:21 pm, I can only wish that's what the overwhelming majority of their neighbors now perceive. It's becoming painfully obvious that they continue to enjoy immense popularity with a large section of the voting population.

    It's sad, it's incredibly sad that the overwhelming majority can be so easily taken in.

  54. Fact is most people in this town don't know squat about what is going on.

  55. 9:56, why don't you actually attend a committee meeting to see what happens? Why are you calling Caroline Brown, member of the Tree Commission, Fire Safety Council, et al, a "syncophant." She was trying to save the Arcadia oaks. Were you there? Come to the next SM3TV meeting on March 2 at 7:30 am, and lay out a plan to improve service or change providers. Rhetoric is cheap.

  56. Remorseless they areJanuary 13, 2011 at 6:44 PM

    Good letter, but they aren't going to change they had every chance. Good you gave them a rescind and do properly deadline by the next council meeting. They need to be served, a suit isn't real until the summons and complaint is thrust into their collective fists. Nice if it could be done on TV.

  57. The CC-1 knew that if they proceeded with their badly formed and illegally noticed plan there would be a lawsuit. And the CC-1, being fools, proceeded anyway.

  58. Glad the amount spent to defeat our Measure V to protect Sierra Madre business district was corrected: yes $170,000.00 was spent to try to defeat us. SMRRD collected about $30,000.00 locally and won big. We can to it again.

  59. Support Kurt Zimmerman and John Crawford and SMARTJanuary 13, 2011 at 7:34 PM

    What happened to the bond money the city collected several years back?
    I think some went to the reservoir, but what happened to the rest? Wasn't it suppose to be used for water pipe infrastructure?
    I want to know what happened to it.

    Kurt Zimmerman used to beg for a forensic audit.
    Does everyone now understand why?

    Go after these criminals, Kurt Zimmerman.
    You went after these greedy people who wanted to destroy downtown Sierra Madre for their own profit and the profit of investor pals.
    You went after them against all odds and you won.

    I'm praying you'll do it again. Thank you.
    Thank you John Crawford. Without your help, we would all be clueless.
    SMART has my support!
    Money is tough right now, but everyone reading this, please prepare to donate whatever you can afford. It will be a winning investment, because if these criminals are allowed to get away with this water/bond debt tax, they will be back again and again, or other greedy people who lie and get on the council.
    They will pick your pockets!
    I don't mind spending money for good reason, but what the hell is in this water rate hike for us, except additional taxes.
    Again, what did we get for the money Bart Doyle floated those bonds for in the first place?

  60. Sierra Madreans for Sane Financial PracticesJanuary 13, 2011 at 7:53 PM

    The Sierra Madre City Council majority has an opportunity to show true leadership: course correction.
    The initial effort was botched, now begin again.
    Put MacGillivray's superior plan into motion and watch the citizens of Sierra Madre come through to support the town.
    Instead, turning their backs on wisdom, they stubbornly hold on to a destructive decision.
    One can only wonder what the motivation is.

  61. 7:53, they're just a bunch of knuckledraggers doing Sacramento's bidding, OK? Lap dogs for their utility employers, that sort of thing.

  62. The Sierra Madre City council makes me as a citizen of this town realize they do not represent me. I am a hard working citizen and I have lost all faith in our Politicians they are not worth praying for. Thanks for the water increase, and I do hereby UPCHUCK on your behalf

  63. Since Susan Henderson's paper constantly defends the City Council, well that does not make her first of all a novel revolutionary. And secondly, if she refuses to represent the "People," well that doesn't make her much of a journalist either.


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